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As the sale and trade of precious metals become more popular among investors, the rising demand incentivizes gold dealers to offer wholesale prices, often giving bulk discounts for customers who buy larger quantities of gold bullion products and other precious metals. Purchasing gold wholesale allows investors to take advantage of low prices and prepare for future changes in the market.
However, while there are several benefits to buying wholesale gold, it’s best to exercise due diligence to ensure the best deal. Below, Oxford Gold Group discusses the potential risks of purchasing gold wholesale and a few key factors that may influence your next investment decision.
Is It Better To Buy Wholesale Gold Bars?
Though the potential for discounts is part of what makes buying precious metals wholesale appealing, it’s important to remember that the spot price will be the same no matter the company from which you purchase your gold. Wholesale retailers must follow the established market guidelines, and the total price of your wholesale order will depend on three critical details:
- The amount of gold bullion you want to purchase
- Which kind of gold bullion products you choose
- The current prices and supply-demand chain of gold bullion
Government mints, such as the U.S. Mint and the Perth Mint, sell physical gold bullion bars and coins to precious metals dealers, who then determine the price and sell these items in small or bulk quantities. The price of gold bullion also depends on the rate of bulk purchases.
Because the spot price may change with time, most premium gold bullion dealers adjust their wholesale and retail prices to reflect the most change in the price of gold bullion per troy ounce. Still, sellers will always base wholesale prices on gold’s current spot price.
Regardless of which company you choose to buy gold from, each dealer selling gold bullion will adjust their overhead costs relative to the current gold price. This means that transactions for a lower dollar amount will likely result in a higher price per ounce. In contrast, those with a more significant dollar amount will likely result in a slightly lower price per ounce, hence the benefit of a bulk purchase.
Buying physical gold bullion in the form of gold bars or coins will likewise present varying prices due to differences in procurement and shipping costs. Because gold bars and coins have different prices for manufacturing and distribution, customers may see variations in wholesale prices from order to order.
Advantages of Buying Gold Coins and Bars in Bulk
While you may not always find the least expensive deal when you buy gold in bulk, customers can enjoy several benefits when purchasing a larger quantity of gold bullion products.
Companies that sell gold bullion refer to the beneficial relationships between themselves and wholesale customers as “economies of scale.” When customers buy gold in bulk, retailers gain a price edge against their competition, which allows them to continue offering bullion at wholesale prices.
In this case, good news for the retailers is good news for you. You can save money on shipping costs, fees, and insurance when you buy gold in bulk rather than a single gold bar or a small quantity of coins. You ultimately pay less when buying gold, and retailers earn a slight advantage over other precious metals dealers.
All in all, bulk purchases create a trade-off that benefits the seller and the buyer.
Where Can You Buy Gold Wholesale?
Mints have always sold gold bars, gold bullion, and other precious metals exclusively to bullion dealers. Therefore, you must purchase your bullion through a dealer. Most investors feel apprehensive about buying gold in bulk because they want to ensure the wholesaler is trustworthy.
However, the guidelines for selling gold bullion are fairly strict. The U.S. Mint requires all wholesale bullion dealers to have a license for trading numismatic coins and completes a thorough review of each company’s financial background before supplying them with gold bullion, bars, and other bulk items. Knowing this information, you can feel comfortable buying gold from a wholesaler or retailer.
Most sellers offer various payment options. Investors can buy gold using credit and debit cards, paper checks, and bank wires. Depending on the company, you may receive a discount for paying with a paper check, as some retailers favor this payment method.
Is There a Drawback to Buying Gold Bullion Wholesale?
In terms of overall costs, it may make more financial sense to buy gold in bulk. After all, it’s cheaper to buy a bulk of gold bars rather than pay for the shipping for a single gold bar. However, the wholesale gold market presents a few unique challenges.
Gold bar sellers must meet the U.S. Mint’s strict criteria, and experts consider them a reliable source. Unfortunately, customers searching the wholesale market sometimes fall victim to criminal or dishonest sales. To prevent this, it would be best if you did your research to find a trustworthy dealer for your gold bars, coins, and bullion needs.
Below, Oxford Gold Group lists some tips for finding the right dealer.
Thoroughly Research Prospective Sellers
First, determine what kind of precious metal you hope to purchase. Then, research companies offering that product.
Once you’ve found a potential dealer, look closely at their customer reviews. Likewise, search for information about their shipping prices and policies, return policies, and fine print features that may affect the overall cost. It also never hurts to reach out to a prospective dealer and ask about their products.
Be Aware of Potential Criminal Activity
An extremely low price may seem tempting, but more often than not, a low price for bulk items indicates criminal activity. Sellers without a professional license or connections to the U.S. Mint may attempt to sell counterfeit gold at a discount to entice buyers. It’s best to avoid these suppliers and search elsewhere.
Some red flags to look out for when searching for a seller include the following:
- Prices are much higher (or much lower!) than the spot price
- The company has no bullion expert on site
- There is no contact information available on the company site
- Customers cannot see the products in person
Buy Gold From Oxford Gold Group
Oxford Gold Group is happy to provide guidance and support if you’re looking to buy gold or other precious metals. We earned our high customer ratings by sharing our wealth of industry knowledge, ensuring fast response times, and offering transparency about our acquisitions and policies.
With such a vast array of products to choose from, including silver, gold, platinum, and palladium, you can find the investment items you desire on our products page. If you’re new to investing and need clarification on how and where to buy precious metals, you can visit our learning center to find all the information you need.
Buying bullion wholesale may seem intimidating at first. However, our team has the knowledge and experience necessary to make the process as simple as possible. Whether you’d like to open an IRA or explore the world of investing, we can provide the information you need to make informed choices.